Budget Telecom Network model (or something close) comes to Europe

Posted on January 11, 2012  /  0 Comments

We predicted the spread the BTN model from Asia to Africa. We saw the duopoly structure in Latin America preventing its spread to that continent. We really didn’t say much about Europe, except in passing. But it looks like the issuance of a fourth license in France (we did not even know France had only three operators! How backward!!) has done the trick. The fourth operator has slashed prices. Good.

In acquiring a license from the government that allowed Free to become the fourth main mobile operator in France, Mr. Niel had to overcome vigorous lobbying from France Télécom and the other operators, who were worried about his reputation for cutting prices.

Mr. Niel signaled Tuesday that he would not depart from the brash, aggressive, price-based marketing formula — an exception in France — that has attracted nearly five million customers to Free’s broadband offering in little more than a decade.

“You now have the chance to teach your operator a lesson,” he said during a news conference in Paris. “You have two choices: You can sign up with Free, or you can call your operator and ask them to match our rates.”

At least one operator, Orange, was sending text messages to subscribers on Tuesday, reassuring them that it was checking to make sure they had the appropriate calling plan for their usage.

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